2. Due to
an accident of democracy, Ed Stelmach goes from third to first place
during a leadership contest and becomes the premier nobody really
wants.

3. Stelmach’s
horrible leadership along with a front bench of resentful hicks and
professional progressives leads Alberta back into deficit.

4. Rise
of the Wildrose Party as real conservatives realize the PC party is
done.

5. Stelmach
steps down.

6. Due to
an accident of democracy, Alison Redford goes from third to first
place during a leadership contest and becomes Alberta’s “first NDP premier”.

7. More
progressive deficits.

8. 2014 –
oil prices crash

9. Due to
an accident of democracy, Alberta elects the NDP to power.

10. 2015 Justin Trudeau and
Gerald Butts lead the anti-oil and gas Liberal party to national
power.

11. Alberta spends four years
getting economically crushed as a result of all this.

12. Provincial debt explodes.

Next year, it's all but certain that Jason Kenney
and the United Conservative Party will be elected, and Alberta can
begin the decade long process of restoring sanity and order to our
political landscape. The one big focal point that is already being
harped on is the provincial debt.

As Kenney wrote in the Calgary
Sun:

This year, Alberta will spend nearly $2 billion
in debt interest payments, more than the budget of 19 of the 23
provincial government departments. By 2023, debt payments will nearly
double to $3.7 billion.

The NDP claims that their high spending is
“compassionate” and avoids “deep cuts”. The reality is that
their overspending means that a growing share of our tax dollars will
enrich bankers and bond holders, rather than funding public services,
a lesson that Canadian governments from left to right, had learned
through bitter experience in the 1990s.

I too remember the 90’s. I remember the crushing
amounts of debt which forced the hand of governments across the
nation to slash and burn. I remember the bloodbath budget of 1995
when Paul Martin had his hand forced by bankers to slash and burn the
federal government. While the rest of the world was booming and
racing toward the 21st century… Canada was penny pinching and
stuck in malaise. The 90’s were a lost opportunity and it was our
fiscal situation that was to blame.

Leftists claimed the pain was due to the choices
of “hard right-wing, fiscally conservative” governments during
that time, but the facts don’t bear that out. Saskatchewan’s NDP
government, led by Roy Romanow, was the first and arguably the worst
when it came to deficit slaying tactics. He had no choice… the bond
holders were in charge.

Fiscal conservatives blamed the largesse of the
proceeding two decades for the situation. If big spending governments
had more discipline with the bottom line, then we wouldn’t have
been in that situation to begin with. This is true, but when does
fiscal discipline ever sell in a democracy? You can be a fiscal
conservative and warm the opposition benches with your principles or
you can promise to give people what they want and win power.
Democracy has functioned like this since forever, much to the chagrin
of fiscal conservatives.

Where do we go from here?

It took Ralph Klein 11 years to pay off a $23
billion debt, and this was done during a time when natural gas and
oil prices exploded ever higher. It was also done during an era when
Alberta was viewed as a safe place to invest, before Stelmach’s
royalty review and the ascendancy of the NDP. Jason Kenney is going
to be facing a $70 billion debt and a province that has now been
permanently scarred by the NDP. We’re looking at generations of
austerity in order to get back to where we were in 2004. Kenney will
use the existence of the debt to restrain spending, but really… that’s
not unlike what Ralph Klein did and all that happened was that we
ended up here.

What should be done instead?

Alberta should default on the debt

I know this is contrary to Canada’s White
Anglo-Saxon Protestant sensibilities, but if fiscal conservatives
want to entrench fiscal conservatism beyond government whims, then
this is a perfect way to do it… and it has been done before.

“We have no other alternative. The government is
broke.” – William Aberhart upon defaulting on Alberta’s
debt in 1935

William Aberhart was the Premier of Alberta from
1935 to 1943. It was the height of the Great Depression and Alberta’s
meagre by today’s standards debt proved to be too much for the
province. Alberta defaulted on the bond holders. Ten years later
Ernest Manning met with bond holders and provided them a take it or
leave it offer, severely reducing the payback obligated. Manning
governed the province until 1968 and over his 25-year reign he left a
fiscally conservative gold standard of balanced budgets and moderate
spending behind him.

The key learning lesson here is that defaulting on
the provincial debt didn’t ruin the province. It simply handcuffed
the provincial government to policies of fiscal conservatism. Without
the ability to borrow…they didn’t. We should do the same today.

Here’s some likely objections…

1. What about in cases of emergencies? What if
we really, really need to run deficits?

Firstly, not having the ability to borrow would
incentivize a “rainy day” savings account. The government would
have to set aside a bit of money every year for emergencies that
might require extra spending such as a forest fire or flood or severe
national recession. If something like that happens then you dip into
savings, not credit lines.

Secondly, proper government should be making and
prioritizing those sorts of emergencies anyway. That’s the point of
government… to provide safety and security for the people. This
shouldn’t require unforeseen spending. It should be a normal part
of budgeting.

Thirdly, anything beyond a flood or fire would
likely be the responsibility of the federal government at that point.
If the Russians decide to invade us, then not having the ability to
run provincial deficits isn’t our top problem.

2. It will create investment uncertainty and
drive away business investment.

Businesses want investment certainty regarding
regulation and cooperation from the provincial government. Money
lenders wouldn’t lend to our provincial government and we’d have
to live within our means as a result. The economy itself would carry
on just fine.

3. The federal government would view this as a
blow to our national credibility.

Who cares what the federal government thinks? They're our enemies. Making them upset is a bonus.

Fiscal conservatives bang their heads against the
wall year after year, decade after decade. The same ideology
revolves, ”If only people will elect governments that are fiscally
conservative, then we won’t have so much debt and that money can be
used for good things like hospitals and tax cuts!”

It never works and democracy is the fault.

Defaulting on the debt, not only wipes the slate
clean, but it will ruin our credit rating and prevent future
borrowing from leftist governments. It will effectively entrench
fiscal conservatism for a generation regardless of how people vote.
We shouldn’t be saddled with almost 100 billion dollars of debt
just because the NDP accidently won power in a protest election.
Jason Kenney has referred to the NDP as an accidental
government… let’s not burden taxpayers with a lifetime of
austerity in order to correct that moment of bad judgement.

Let’s default on the debt and begin anew with a
policy and culture of fiscal conservatism inoculated from democracy,
that permeates throughout the province for a generation. Let us
default on the debt.